Technology

Facebook warns it is 'underreporting' iOS ad results amid Apple privacy changes

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A 3D plastic representation of the Facebook logo is seen in this illustration in Zenica, Bosnia and Herzegovina, May 13, 2015. REUTERS/Dado Ruvic

Sept 22 (Reuters) - Facebook Inc (FB.O) said on Wednesday it is underreporting the results of its advertising business on Apple Inc (AAPL.O) iOS devices, acknowledging that recent privacy changes from the iPhone maker have made it more expensive and difficult for brands to advertise on Facebook.

Shares of the social media giant were down 3.7% at $344.32 in morning trading.

Facebook said in a blog post it estimates it is underreporting "conversions," an industry term that includes buying of products or other actions a person takes after seeing an ad, by 15%, adding that the figure varied among individual advertisers.

Facebook said it believed actual conversions such as sales and app downloads are higher than reported.

The announcement comes as Facebook and the larger digital advertising industry continues to grapple with the privacy controls implemented by Apple in April, which are designed to limit digital advertisers from tracking iPhone users for advertising purposes without their consent. read more

Facebook fought back against the changes, arguing it would hurt small businesses that rely on targeted advertising to find new customers.

The social media company previously warned investors that there would be "greater impact" of the Apple changes on Facebook's ad business during the third quarter compared with its second quarter.

In Wednesday's blog post, Facebook outlined steps advertisers should take to better measure the results of their ads. The company said it is investing in new tools and capabilities to help brands with their marketing amid the Apple changes.

Reporting by Sheila Dang in Dallas Editing by Matthew Lewis

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